I have a 1973 Fiberform with a Mercruiser 888 (Ford 302 188 HP) that I bought cheap for a project. The oil was chaulky white/gray, so I disassembled the engine down to the heads in hopes of finding a leaky gasket, but all the seals seem to be in tack. There is some surface rust and pitting on the rods, but everything else looks to be in new condition. There is no rust on the plugs, the pistons look good as well. I inspected the block and could not find any cranks and the heads don't show any warping. Where else can the water come from to get in the oil?